OSUR

• Core Transformation & Strategic Progress

  • OraSure has completed portfolio restructuring and simplification, and is now executing a focused growth strategy, with 2026 positioned as a transition year back to sustained growth.
  • The company is insourcing third-party contracted work to leverage its in-house Pennsylvania manufacturing capabilities, while maintaining disciplined cost controls to expand margins.
  • Management is prioritizing decentralized diagnostic testing and sample collection solutions, targeting high-value markets with risk-adjusted returns, and aims to reach operating cash flow break-even by early 2027.

• Key Regulatory & Innovation Milestones

  • Received FDA clearance for the ColiPDX Urine Collection Kit with proprietary nucleoprecision chemistry, indicated for 8 STI testing use cases with Roche's Cobas molecular diagnostic platform. Launch has started with strong early customer interest.
  • Secured FDA emergency use authorization for the second-generation OraQuick Ebola 2.0 rapid antigen test, developed in partnership with BARDA, which detects all four Ebola species that cause human disease, including the strain behind the current Central Africa outbreak.
  • The UK NICE issued draft guidance recommending the Z-Wig Endotest for endometriosis, which uses OraSure's saliva collection and stabilization technology, marking key commercial validation of the company's sample management capabilities in women's health.
  • Sickle Scan, acquired from Biomedomics, is on track to grow revenue twice as fast in 2026 as it did in 2025, following successful integration into OraSure's international commercial channels.

• Business Segment Progress

  • International Diagnostics: The business is focused on stabilization, diversification and localization of supply chains. It is expanding nearshoring/in-country assembly for OraQuick HIV self-tests to meet customer demand for resilient local supply, and pursuing new national health program opportunities for Sickle Scan in high unmet need geographies.
  • U.S. Diagnostics: Saw stronger Q2 public health demand, with strong demand for the market-leading OraQuick HIV self-test. Consumer and B2B2C channels (including telehealth and digital access points) continue to grow, building a foundation for future over-the-counter and decentralized STI testing.
  • IntelliQuick CTNG (chlamydia/gonorrhea) Rapid Molecular Self-test Update: Following constructive feedback from the FDA, OraSure voluntarily withdrew its submission to incorporate agency comments ahead of resubmission. FDA clearance and U.S. launch are no longer expected in 2026. Management remains confident in the test's strong clinical performance, and the delay does not change the company's 2026 revenue growth outlook or 2027 break-even target.

• Financial & Capital Update

  • GAAP gross margin expanded 120 basis points sequentially to 43.5%, driven by lower scrap and improved operational efficiencies. Non-GAAP gross margin also increased to 44.2% from 43.4% in Q1.
  • The company ended Q2 with zero debt and $161 million in cash and cash equivalents. It has repurchased 7.7 million shares (nearly 10% of outstanding shares) for $22 million under its $40 million buyback program, utilizing 55% of the authorization. Share repurchases were paused in Q2 to prioritize balance sheet flexibility for new product launch investments.

• Q3 2026 total revenue is guided to a range of $29.5 million to $32.5 million.
• Q3 2026 gross margin is expected to be similar to the Q2 2026 level.
• The long-standing outlook of reaching operating cash flow break-even when entering 2027 is maintained, with no downward or upward revision to this target. The 2026 full-year revenue growth outlook is also unchanged, despite the IntelliQuick CTNG launch delay.

Total company revenue for Q2 2026 was $30.6 million, representing a 9.7% sequential increase from Q1 2026.

1. Diagnostic Products: Generated $19.4 million in Q2 revenue, growing 14.7% sequentially. This segment accounted for 63.4% of total Q2 revenue. Growth was driven by stronger U.S. public health demand, fiscal year customer purchasing patterns, higher syphilis test revenue, and the addition of Sickle Scan sales from the Biomedomics acquisition. U.S. diagnostic revenue was higher than international diagnostic revenue in the quarter.

2. Sample Management Solutions (SMS): Generated $9.9 million in Q2 revenue, growing 9% sequentially. This segment accounted for 32.4% of total Q2 revenue. Growth was seen across all key customer segments, including commercial advanced diagnostic labs, precision healthcare applications, and early recovery in academic and research channels.

• The delay in IntelliQuick CTNG FDA clearance means the product will not launch in 2026 as originally planned, though management notes this does not impact 2026 financial targets.
• Continued federal funding pressure for U.S. public health testing programs creates uncertainty for U.S. diagnostic revenue.
• The advanced genetic testing and academic research end markets for sample management solutions have remained muted post-COVID, though early signs of recovery have been observed.
• Actual results may differ materially from forward-looking statements due to a range of factors, which are discussed more fully in the company's SEC filings (Form 10-K for 2025, quarterly Form 10-Q reports, and other filings).

Q: What is the expected timing for IntelliQuick CTNG resubmission and approval, and how will the delay impact the company's 2026 cost structure? / A: Management confirms the company is moving quickly to incorporate FDA feedback and plans to resubmit the application, but timing is still being finalized and more details will be shared with investors in future updates. The delay will not increase total annual cash usage: incremental costs for resubmission will be offset by a reduction in required milestone payments, leading to a lower total expected cost for the program than originally planned. Management reiterates that the delay does not change the company's 2026 full-year revenue growth outlook.

Q: Can you update on demand trends for Sample Management Solutions from advanced genetic testing labs? / A: Management reported continued sequential growth for the SMS segment, and is seeing consistent early recovery across most advanced genetic testing labs, which had remained muted post-COVID. Uptick in demand is also visible in soft adjacent segments like microbiome sample collection, confirming broad based progress across the segment.